Manufacturing of goods under own brand name is not job-work

CESTAT, MUMBAI BENCH

Y.M. Krishna SSK Ltd.

versus

Commissioner of Central Excise, Kolhapur

ORDER NOS. A/775/2012/CSTB/C-I & S/1361/2012/CSTB/C-I
APPLICATION NO. ST/S/1207 OF 2012
APPEAL NO. ST/362 OF 2012

NOVEMBER  5, 2012

ORDER

Ashok Jindal, Judicial Member

The appellants are in appeal against impugned order wherein service tax demand of Rs. 2,26,147/- along with interest and various penalties under the Finance Act, 1994 have been confirmed against them along with an application for stay.

2. After hearing both sides in detail, we find that the appeal itself can be disposed of at this stage, therefore, we waive the requirement of pre-deposit of entire amount of demand and take up the appeal for final disposal.

3. The facts of the case are that the appellants are the manufacturer of sugar and denatured spirit/denatured ethanol. The appellants are also having their brand name registered as “Pahili Dhar”. The appellants were manufacturing country liquor under the brand name of “Pahili Dhar”. The appellants were having an agreement with M/s. Talreja Trade (HUF) for marketing of the said country liquor. M/s. Talreja Trade (HUF) is also supplying the essence and packing materials for manufacturing of country liquor to the appellants.

4. The revenue is of the view that the raw material is being supplied by M/s. Telreja Trade (HUF) to the appellant and the appellants are job-workers for Talreja Trade. Therefore, the appellants are liable to pay service tax under the category of “Business Auxiliary Service”. Accordingly, the impugned demands are confirmed. Aggrieved by the said order, the appellant is before us.

5. After considering the submissions made by both sides and going through the records, we find that the appellants are the manufacturer of country liquor under the brand name “Pahili Dhar” which is a registered trade name of the appellant themselves. The appellants are having the agreement with M/s. Talreja Trade (HUF) for marketing this liquor. Therefore, it cannot be said that the appellant are the job-workers for Talreja Trade as they are the selling agents of the appellants. With these observations, we find that the appellant are not liable to pay service tax under “Business Auxiliary Service” on the above mentioned activity. Accordingly, the appeal is allowed with consequential relief, if any.

6. The stay application is also disposed off in the same manner.

NF